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Hong Kong shares close off lows on US economic woes; HSI loses 4.04 pct-UPDATE
HONG KONG, Nov 20, 2008 (XFN-ASIA via COMTEX) --
Share prices closed off lows as Asian markets tumbled
following a fresh batch of negative data that fueled fears of a prolonged US
economic slump.
The Hang Seng index closed down 517.24 points or 4.04 pct at today's high of
12,298.56, off a low of 11,976.88. Turnover was relatively thin at 44.62 bln
hkd.
They said many investors continued to refrain from taking positions amid global
economic uncertainties.
China stocks led losers, with metals and material firms tumbling after another
selloff overnight in commodities. Mainland banks and property firms also took a
hit.
Hong Kong property developers were mostly sharply lower amid more evidence of
weak housing demand, with some economists predicting that the city's economy
will remain in recession until mid-2009.
"Our market simply took its lead from Wall Street and Tokyo," said Eric Yuen,
head of research at Dao Heng Securities.
"With the grim outlook for the US economy and uncertainties on how it will be
further affected in the event of a collapse of the country's big three car
manufacturing companies, it's anybody's guess how the global economy will be
affected ultimately," he said.
The US Federal Reserve lowered its forecast range for 2008 gross domestic
product growth and said the economy could shrink by 0.2 pct next year.
Meanwhile, the latest data showed US consumer prices fell at a record pace in
October and housing starts sank to a new low.
As a result of the negative news, the Dow Jones Industrial Average plunged over
5 pct overnight to the lowest level in five and a half years.
Yuen said average daily turnover remains low around 50 bln hkd, compared with
60 bln hkd during the August to October period.
"I believe support for the key index will be firm at 12,000 points, with many
short- and long-term investors probably entering the market at this level," he
said.
Yuen predicts that global equity markets will remain under pressure for the
next three to six months.
Among large-caps, HSBC was down 3.60 hkd or 4.55 pct at 75.60, China Mobile
lost 1.0 hkd or 1.5 pct to 65.50, Hong Kong Exchanges & Clearing slumped 3.50
hkd or 6.19 pct to 53, China Life lost 0.92 hkd or 4.62 pct to 19, and Hutchison
Whampoa was down 0.40 hkd or 1.13 pct at 35.
China Mobile, the country's largest wireless operator, said it added 7.194 mln
subscribers in October, down from 7.246 mln net additions in September.
Morgan Stanley upgraded China Mobile to "overweight" from "equalweight", citing
attractive valuations. It has a target price of 80 hkd on the stock.
Other telecom stocks were also lower in line with the market. China Unicom was
down 0.47 hkd or 5.18 pct at 8.61, and China Telecom was down 0.15 hkd or 5.62
pct at 2.52.
China Unicom added 1.219 mln wireless subscribers in October, raising the total
to 131.95 mln. Its fixed-line users fell by 792,000 to 106.54 mln.
China Telecom's fixed-line users at the end of October totaled 211.88 mln, down
1.09 mln from the end of September.
Local property developers slumped, extending recent weakness, on demand worries
amid economic woes.
Sino Land plunged 0.47 hkd or 8.01 pct to 5.40, Henderson Land lost 0.70 hkd or
2.94 pct to 23.15, Sun Hung Kai was down 2.65 hkd or 4.97 pct at 50.70, and
Cheung Kong was up 0.30 hkd or 0.46 pct at 65.30.
Hopewell Holdings outperformed the sector, falling only 0.20 hkd or 1 pct to
19.90, after news that it has scaled down its planned mega hotel and commercial
development in Hong Kong's Wanchai district and could break ground on the
long-delayed project soon.
It reduced gross floor area by 31 pct and will build a hotel of 55 storeys,
instead of 93 as originally planned. The project is expected to cost 5 bln hkd.
The property sector index fell 554.48 points or 3.89 pct to 13,714.80.
Mainland banks were also sharply lower on worries that their bad debts will
rise as more and more companies feel the impact of the economic downturn.
ICBC slipped 0.21 hkd or 6.02 pct to 3.28, China Construction Bank slumped 0.16
hkd or 4.27 pct to 3.59, Bank of Communications fell 0.13 hkd or 3.04 pct to
4.14, and Bank of China was off 0.05 hkd or 2.42 pct at 2.02.
Among local banks, Hang Seng Bank was down 1.05 hkd or 1.2 pct at 86.65, Bank
of East Asia was down 0.70 hkd or 4.79 pct at 13.90, and BOC Hong Kong was down
0.15 hkd or 1.91 pct at 7.69.
The financial sector index was down 848.88 or 4.23 pct at 19,214.53.
Metals and other resources stocks dropped sharply as oil futures fell 1.4 pct
to settle overnight at 53.62 usd per barrel, the lowest since Jan 22, 2007,
while other commodities were also sold down.
Pure oil producer CNOOC was down 0.35 hkd or 6.32 pct at 5.19.
Refiner Sinopec was down 0.16 hkd or 3.63 pct at 4.25, and PetroChina, which is
both a producer and a refiner, fell 0.24 hkd or 4.25 pct to 5.41.
Aluminum producer Chalco fell 0.18 hkd or 5.94 pct to 2.85, Jiangxi Copper
slipped 0.22 hkd or 5.5 pct to 3.78, coal miner China Shenhua was down 0.90 hkd
or 7.72 pct at 10.76, and Angang Steel tumbled 0.85 hkd or 15.29 pct to 4.71.
China telecom equipment maker ZTE Corp was up 0.42 hkd or 2.96 pct at 14.62,
extending yesterday's 12.5 pct gain, on hopes that Beijing will soon issue
third-generation wireless services licences to carriers, creating demand for new
equipment.
Fund manager Value Partners plunged 0.21 hkd or 12.21 pct to 1.51 after it
warned of a significant fall in full-year profit due to the slumping equity
markets.
VTech plunged 1.44 hkd or 6.92 pct to 19.36 after it said its first half to
September profit fell to 68.8 mln usd from 86.5 mln a year earlier.
The Hang Seng China Enterprises index was down 298.22 points or 4.6 pct at
6,190.90.
(1 usd = 7.8 hkd)
jun.concepcion@xfn.com
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